Northern Rock IS to be Nationalised!

JohnDotCom · 17th February 2008, 18:16

Northern Rock To Be Nationalised

By Sky News <CITE class=auth>SkyNews - 2 hours 59 minutes ago</CITE>
<CITE class=auth></CITE>
Chancellor Alistair Darling has announced that the troubled Northern Rock bank will be nationalised.
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Sir Richard Branson's Virgin Group and a rival in-house management team had both tabled offers for the lender.
But it is thought neither bid was considered good enough to be in the taxpayers' interest and the bank will now be nationalised.
The Newcastle-based lender was forced to call on emergency funding from the Bank of England last September after soaring costs as a result of the drying up of the money markets.
It prompted the first run on a UK bank in nearly 150 years as worried savers queued outside branches to withdraw deposits. Investors were also hit as share prices dived.
This time last year, the bank was worth around Â£5.3bn. It is now worth just Â£375m.
It was thought the Government was hoping to secure between Â£100m and Â£200m for the taxpayer if Northern Rock were to be revived within three years.
It would now appear that neither Virgin nor the bank's own management team were prepared to offer this concession.
Reacting to news of the nationalisation, Robin Ashby from Northern Rock Small Shareholders, said he was "shocked" and "appalled".
He slammed the Government's decision and said "it was part of the long process of mis-management of the whole Northern Rock saga right from the beginning".
"They will be trying to get rid of mortgage holders as quickly as they can. There will be more repossessions."
Mr Ashby, who backed the in-house management team bid, added: "Britain's reputation as a financial centre will be very badly damaged as a result of this decision."
But John McFall, chairman of the Treasury Select Committee, said: "I welcome the Government's decision. They have explored every avenue.
"At the end of the day the biggest issue is the safeguarding of taxpayers' money. If nationalisation saves that money, that has to be the correct step in the long term.
Sky's Jonathan Levy said: "There is billions of pounds tied up in the bank keeping it going. It would appear the two rival bids don't offer the kind of protection to the taxpayer that the Government feels is essential."
"The Government won't like the political connotations of nationalisation. This is a Labour Government that came to power rejecting the image of Labour in the 1970s and the whole idea of nationalised industry.
"You can imagine the Tories will make much of the fact that there will be a nationalised industry at the centre of the news."

tourerfogey · 17th February 2008, 18:23

Much as I hold the labour Government in total derision, this is really something that couldn't have been avoided - the outcome has been dictated by circumstances.

But hey, let's use the opportunity to bash 'em more anyway!

JohnDotCom · 17th February 2008, 18:25

I don't get why the Shareholders are screaming so much.
Shares are a Gamble, some you win some you loose.
Why should the public bail out there Mis Investment!
They never Moan about the Profits they rake off.

tourerfogey · 17th February 2008, 18:33

Quote:

Originally Posted by JohnDotCom

I don't get why the Shareholders are screaming so much.
Shares are a Gamble, some you win some you loose.
Why should the public bail out there Mis Investment!
They never Moan about the Profits they rake off.

I have to say :

monkeyhanger · 18th February 2008, 09:47

as soon as it's finalised i'll be into it like a shot- profits from any bank going back to the government has got to be a good long term investment. i only hope they will take me and my overdraft!!!!!

Pete · 18th February 2008, 10:04

I'll be curious to see how this Government handles the issue of reposessions. Bit of a sticky moral question there which even their evasive doublespeak will have a hard time to get round.

tapped · 18th February 2008, 10:15

Quote:

Originally Posted by tourerfogey

I have to say :

couldn't agree more. Capitalism sometimes loses you money too....

Raistlin · 18th February 2008, 10:33

Quote:

Originally Posted by JohnDotCom

I don't get why the Shareholders are screaming so much.
Shares are a Gamble, some you win some you loose.
Why should the public bail out there Mis Investment!
They never Moan about the Profits they rake off.

Reminds me of the Lloyds "Names" a few years back.

Quietly raking in obscene profits from underwriting insurance then collectively squealing like stuck pigs when there was a net loss and threatening all kinds of legal action etc. etc.

Amazing how some people don't remember that there are two sides to a contract.

rover · 18th February 2008, 15:41

If the Government hadn't stepped in the Rock would have been wound up,with the shares being worth next to nothing.Unfortunately many of its shareholders will be ordinary North East folk who thought they were investing in a well managed local organization.

tourerfogey · 18th February 2008, 16:26

Shares are only for people who understand them - If people invest in shares without understanding the potential downside then they are foolish. However, there is still the liklehood that many indirect investors will be affected - those who have invested into pension plans and the like where the holding institution has in turn invested in Northern Rock.

17th February 2008, 18:16	#1
JohnDotCom * Rover 75 FaceLift Tourer CDTi 170BHP Auto ConnSE 2005 Model Starlight Silver Join Date: Nov 2006 Location: Abergele Posts: 28,735 Thanks: 0 Thanked 6 Times in 5 Posts	Northern Rock IS to be Nationalised! Northern Rock To Be Nationalised By Sky News <CITE class=auth>SkyNews - 2 hours 59 minutes ago</CITE> <CITE class=auth></CITE> Chancellor Alistair Darling has announced that the troubled Northern Rock bank will be nationalised. <!-- SpaceID=2022435310 loc=LREC noad --><SCRIPT language=javascript>if(window.yzq_d==null)window.y zq_d=new Object();window.yzq_d['YLkHTtmSs_M-']='&U=1287use13%2fN%3dYLkHTtmSs_M-%2fC%3d-1%2fD%3dLREC%2fB%3d-1';</SCRIPT><NOSCRIPT></NOSCRIPT> Sir Richard Branson's Virgin Group and a rival in-house management team had both tabled offers for the lender. But it is thought neither bid was considered good enough to be in the taxpayers' interest and the bank will now be nationalised. The Newcastle-based lender was forced to call on emergency funding from the Bank of England last September after soaring costs as a result of the drying up of the money markets. It prompted the first run on a UK bank in nearly 150 years as worried savers queued outside branches to withdraw deposits. Investors were also hit as share prices dived. This time last year, the bank was worth around Â£5.3bn. It is now worth just Â£375m. It was thought the Government was hoping to secure between Â£100m and Â£200m for the taxpayer if Northern Rock were to be revived within three years. It would now appear that neither Virgin nor the bank's own management team were prepared to offer this concession. Reacting to news of the nationalisation, Robin Ashby from Northern Rock Small Shareholders, said he was "shocked" and "appalled". He slammed the Government's decision and said "it was part of the long process of mis-management of the whole Northern Rock saga right from the beginning". "They will be trying to get rid of mortgage holders as quickly as they can. There will be more repossessions." Mr Ashby, who backed the in-house management team bid, added: "Britain's reputation as a financial centre will be very badly damaged as a result of this decision." But John McFall, chairman of the Treasury Select Committee, said: "I welcome the Government's decision. They have explored every avenue. "At the end of the day the biggest issue is the safeguarding of taxpayers' money. If nationalisation saves that money, that has to be the correct step in the long term. Sky's Jonathan Levy said: "There is billions of pounds tied up in the bank keeping it going. It would appear the two rival bids don't offer the kind of protection to the taxpayer that the Government feels is essential." "The Government won't like the political connotations of nationalisation. This is a Labour Government that came to power rejecting the image of Labour in the 1970s and the whole idea of nationalised industry. "You can imagine the Tories will make much of the fact that there will be a nationalised industry at the centre of the news."

18th February 2008, 10:04	#6
Pete Owners Club Director Rover 75 Join Date: Oct 2006 Location: Sherfield-on-Loddon Posts: 4,878 Thanks: 137 Thanked 996 Times in 444 Posts	I'll be curious to see how this Government handles the issue of reposessions. Bit of a sticky moral question there which even their evasive doublespeak will have a hard time to get round. __________________ Follow The Club On Twitter

17th February 2008, 18:23	#2
tourerfogey Banned Join Date: Nov 2006 Posts: 2 Thanks: 0 Thanked 1 Time in 1 Post	Much as I hold the labour Government in total derision, this is really something that couldn't have been avoided - the outcome has been dictated by circumstances. But hey, let's use the opportunity to bash 'em more anyway!

17th February 2008, 18:25	#3
JohnDotCom * Rover 75 FaceLift Tourer CDTi 170BHP Auto ConnSE 2005 Model Starlight Silver Join Date: Nov 2006 Location: Abergele Posts: 28,735 Thanks: 0 Thanked 6 Times in 5 Posts	I don't get why the Shareholders are screaming so much. Shares are a Gamble, some you win some you loose. Why should the public bail out there Mis Investment! They never Moan about the Profits they rake off.

18th February 2008, 09:47	#5
monkeyhanger Regular poster rover 75 1.8 classic Join Date: Jan 2008 Location: peterlee Posts: 47 Thanks: 0 Thanked 0 Times in 0 Posts	as soon as it's finalised i'll be into it like a shot- profits from any bank going back to the government has got to be a good long term investment. i only hope they will take me and my overdraft!!!!!

18th February 2008, 15:41	#9
rover Loves to post Rover 75 Saloon Join Date: Nov 2006 Location: Staffs/Derbyshire Border Posts: 285 Thanks: 19 Thanked 29 Times in 14 Posts	If the Government hadn't stepped in the Rock would have been wound up,with the shares being worth next to nothing.Unfortunately many of its shareholders will be ordinary North East folk who thought they were investing in a well managed local organization.

18th February 2008, 16:26	#10
tourerfogey Banned Join Date: Nov 2006 Posts: 2 Thanks: 0 Thanked 1 Time in 1 Post	Shares are only for people who understand them - If people invest in shares without understanding the potential downside then they are foolish. However, there is still the liklehood that many indirect investors will be affected - those who have invested into pension plans and the like where the holding institution has in turn invested in Northern Rock.